Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, September 7, 2011

Schapiro Says Business Roundtable v. SEC is Over

The SEC confirmed that it is not seeking further review of Business Roundtable v. SEC, the D.C. Circuit opinion that vacated Rule 14a-11 that would have required companies to include shareholders' director nominees in company proxy materials in certain circumstances. Chairman Mary L. Schapiro issued the following statement:

"I firmly believe that providing a meaningful opportunity for shareholders to exercise their right to nominate directors at their companies is in the best interest of investors and our markets. It is a process that helps make boards more accountable for the risks undertaken by the companies they manage. I remain committed to finding a way to make it easier for shareholders to nominate candidates to corporate boards.

"At the same time, I want to be sure that we carefully consider and learn from the Court's objections as we determine the best path forward. I have asked the staff to continue reviewing the decision as well as the comments that we previously received from interested parties."

The SEC's decision is consistent with its past practice.  The D.C. Circuit has in recent years vacated several SEC rules, and the agency did not seek further review in those instances.

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